Mumbai, Dec. 23: Canara Bank today made a sparkling debut on the stock exchanges, listing at a premium and closing at a whopping 40 per cent higher than its IPO price of Rs 35.

The stock listed at Rs 43 on the Bombay Stock Exchange, a premium of around 23 per cent or Rs 8 to its IPO price. The scrip opened at Rs 42 on the National Stock Exchange. However, what followed later, stumped many observers. The counter witnessed hectic activity, an indication of the bullishness surrounding banking scrips after the Securitisation Bill was cleared by Parliament.

Many of the nationalised banks have recorded good gains in recent trading sessions, buoyed by reports that their balancesheets are set to improve as recovery of non-performing assets (NPAs) gets underway. Officials from Canara Bank here said the bank was looking forward to recovering more than Rs 500 crore of NPAs this year.

On the BSE, the stock after opening at Rs 43, shot up to a day’s high of Rs 49.80, a rise of 16 per cent over its initial price. While it ended at Rs 49.15, the Canara Bank scrip was the top traded counter on the exchange, recording volumes of 84.94 lakh shares and a turnover of Rs 38.72 crore. Combined with NSE, total number of shares that changed hands were around 2.56 crore.

Canara Bank was the fourth nationalised bank after Union Bank, Andhra Bank and Allahabad Bank to come out with an initial public offer in the recent past. The IPO that was open between November 18 and November 27, mobilised Rs 692 crore against the initial plan of over Rs 380 crore. The issue was over-subscribed 1.8 times.

The bank plans to use the IPO proceeds to augment long term resources and maintain a capital adequacy ratio of around 12 per cent. The offer is expected to take the bank’s equity capital to Rs 410 crore and the government holding was set to come down to 73.17 per cent from 100 per cent.

Net profit of the bank rose 160 per cent to touch Rs 741 crore as on March 31, 2002. Capital adequacy ratio of the bank stood at 11.88 per cent during the year. While total advances of the bank grew by 19 per cent to Rs 33,126 crore (Rs 27,831 crore), total deposits grew by 8 per cent to Rs 64,030 crore (Rs 59,069 crore).